The document discusses the problem of counterfeit and adulterated drugs in the pharmaceutical supply chain. It argues that track and trace solutions alone are not enough to authenticate drugs and protect against counterfeiting. The document promotes the use of Energy-Dispersive X-Ray Diffraction (EDXRD) technology, which can authenticate drugs by analyzing their molecular structure without needing to open sealed packaging. EDXRD provides a non-destructive way to verify drugs are genuine and has applications across the supply chain from production to dispensing. The document concludes that supporting multiple authentication technologies throughout the supply chain from production to the point of dispense is the most effective way to protect against counterfeiting.

1. Materials Authentication and Verification within
the Pharmaceutical Supply Chain:
Working with and Moving Beyond Track and Trace
Alan Clock
Senior Vice President
XStream Systems, Inc.
John Lundquist
Vice President, Sales and Business Development
XStream Systems, Inc.

2. Counterfeit and Adulterated Drugs
The Scope of the Problem
“Most of the counterfeits are
detected largely by accident. It
means that we are just seeing the
tip of the iceberg. We presume
there is an iceberg to be found
somewhere under the tip, but no
one has been able to put their head
under the water.”
-- Valerio Reggi, World Health Organization (WHO)
2007

5. Track and Trace vs. Authentication
“ There is no single quot;magic bulletquot; against the growing number of sophisticated counterfeiters;
rather, a multi-pronged strategy to secure the drug supply could be much more difficult for
counterfeiters to overcome than any single method...” --- FDA Initiative 2007
Provides Molecular
electronic identification
verification
Authentication
Track & Trace
Counterfeits
Detects
Traces Adulterated
variants in
transfer of Diversion
Contaminants molecular
product
structure by
through the Up-labeling
profiling
supply chain
Identity confirmed
Overt/Covert
beyond visual
packaging security
verification

6. Current Regulatory Initiatives
• Most initiatives based on Track and Trace solutions
– RFID, Pedigree, 2D Barcodes, Package Serialization
– Expensive to convert and maintain
– Multiple technologies require participants to „pay to play‟
– Require participation by all members of the Supply Chain
– Solutions restrict participation to ADRs with the resources to comply
– Ultimately the proposed technologies only authenticates the packaging not the
medication
– Major “holes” that undermine the security aspect
– Primarily it is only an effective protection against diversion
• States looking for Federal direction/oversight (35+ state pedigree laws)
• Congress attempting legislative solutions based on Track and Trace
• XStream Systems working to include EDXRD Technology and
Authentication in proposed legislation
• This current process is very dynamic but lacks industry consensus

7. Authentication at the Point Of :
Production – Distribution – Dispensing
Secure-Protected-Connected
Rx Rx Rx Rx
Manufacturers Distribution Dispensers Regulatory
- Brand - Wholesalers - Mail Order Authorities
- Generic - Regional - Central Fill - FDA
- Contract - Secondary - Warehousing - DEA
- Specialty Groups - Federal
- Reverse - State
Logistics - WHO
Receiving / Returns Verification Secured Inventory

8. Authentication Technologies of the
Pharmaceutical Supply Chain
 Destructive Technologies
 Require sample preparation
 Laboratory grade technology
 Most require laboratories and high end technicians
 Can be time consuming and require staging
 Best used in pre and post production and some QC applications
 Effective in identifying counterfeit, adulterated and contaminated materials
 Surface Scan Technologies
 Require direct or optical access to material
 Easy to use
 Limited to surface scan of material
 Best used at the point of dispense
 Effective in identifying medication errors, counterfeit and contaminated materials
 Penetrating Authentication Technologies (EDXRD)
 Authenticate the material inside its sealed container
 Non-destructive does not require access to the contents of the unit of sale
 Easy to use, does not require technical resource
 Best used within the QC and distribution portions of the Supply Chain
 Effective in identifying counterfeit, adulterated and contaminated materials

9. Types of Rx Authentication
Distribution Dispensing
Production
• EDXRD • NIR
• Mass Spec
• Raman
- Penetrating
• ADXRD
- Non-destructive - Surface Testing
- Granular Testing
- Non-tech Testing - Non-destructive
- Destructive
- Rapid Process - Non-tech Testing
- Sample Prep
- Lab Testing
- Lengthy Process

10. Technology Comparison
XT250 Materials Identification System EDXRD NIR ADXRD ADXRD RAMAN
Product Applications Various LAB LAB LAB LAB
Features
Detect through a non-transparent sealed container Yes No No No No
Penetration Depth High Surface Low Low Surface
Ease of Use Simple Complex Complex Complex Complex
False alarm rates Low High Low Low High
Scan with no sample preparation Yes Yes No Yes No
Detect Prescription Drugs/Controlled Substances Yes Yes Yes Yes Yes
Used for Laboratory Research, Forensics Yes Yes Yes Yes Yes
Can create its own library of signatures Yes Yes No No Yes
Speed - Detection Time - Typical 2 min 2 min <30sec 1 hr <10sec
Identify molecular structure Yes Yes Yes Yes Yes
Qualitative Measurements - YES/NO Yes Yes Yes Yes Yes
Quantitative Measurments - Dosages Yes Yes Yes Yes Yes
Liquids Yes* Yes Poor Poor Yes
Size of Unit Medium Medium Medium Medium Medium
Largest Sample Size 2quot;x 5quot; tbd tbd infinite
.1mm x
Smallest Sample Size .75quot;x 3quot; 4mm microns
* Some Liquids - Studies under way - positive findings

11. The XT250TM Materials Identification System
The XT250 uses Energy-Dispersive X-Ray Diffraction (EDXRD), a highly sensitive and
accurate technology, to provide on-site, real-time, pharmaceutical
Identification, Verification and Authentication

12. The Basics of X-Ray Diffraction
X-ray diffraction is governed by Bragg’s Law, which describes
how X-rays are scattered (i.e., diffracted) when they interact
with a crystalline material having a periodic structure.
Detector
Substance Seen
At Molecular Level Diffraction
Signature
θ Diffraction Angle
X-Ray Source
Of Wavelength λ
d-spacing
Bragg‟s Law: nλ = 2dsinθ
n = an integer
λ = wavelength of X-ray
d = d-spacing of the analyte
Sample
(distance between symmetry planes)
θ = X-ray diffraction angle
Company Confidential

13. The XT250 System Confocal Geometry
38.1 mm
2θ
11.49 mm
CdTe
Detector
Source Voxel
Collimator 2
Collimator 1 (Scattering Volume)
Technology – EDXRD able to see through packaging to authenticate the drug
itself without the addition of tags or markers.
Library of secure detectors – Molecular/Crystalline matching to manufacturers
products at the NDC level -securing Brands and protecting Wholesaler inventory.
Connectivity –Secure Pharma Network integrates seamlessly with current
Regulatory and Enterprise Software, Inventory & Pedigree initiatives – rapid on
site testing tracks and validates inventory

14. Energy Dispersive X-Ray Diffraction (EDXRD) & the XT250
XT250 Materials Identification
•Few moving parts > high reliability
•In-house testing results > lower costs
•Remote Updates > low maintenance
•99.7% Accuracy > superior detection
1. 2. 3. 4. 5.
1.) An X-ray beam is generated by an X-ray source
2.) A collimator (lens) is used to direct the beam
3.) The beam passes through the sample material
4.) The beam is diffracted (i.e. deflected) when passed through the sample and a second
collimator focuses the beam to a detector, which collects the unique “fingerprint”
5.) Our Material Recognition Software Engine (MRSE) then identifies the unique fingerprint

15. (Animation of Automated
Authentication Technology)

17. Beyond Track and Trace – Authentication
Wholesaler **
Raw Finished
Production Wholesaler **
Goods **
Material **
Wholesaler **
**
Global Suppliers Manufacturers Wholesalers
** Repackagers
**
** Mail Order
**
** XT250 Authentication
System
** Central Fill
**
2nd Tier Distributors
r
Pharmacy
Consumer
Reverse Logistics **

18. Identification-Verification-Authentication
• Achieve Trace & Trace Efficiencies
– Pedigree verification/integration
– Returns verification/integration
– Counterfeit Protection
– Sourced Product Protection
– Corporate Oversight of Solution
– Authentication Advantage in Marketplace
• Drive Technology to Supply Chain Partners
• Regardless of the internal security protocols at each step of the
supply chain there are a variety of logistic partners involved in
the transfer, distribution and delivery of the product. Securing
your inventory and the “Pass” to the next link in the Supply
Chain is the fundamental solution.

19. Conclusion
• Sophisticated networks and organizations are taking advantage of available
technology, regulatory gaps and high rate of return, to produce counterfeit
or adulterated medications
• High reward versus low risk have lead to this global menace threatening
National Security and healthcare consumers
• Regulatory agencies are gravitating towards a solution which restricts the
members of the Rx Supply Chain
• Current Track and Trace methods are limited in effectiveness, exclude many
within the supply chain, have a high cost to execute and maintain and are
only a transactional protection from product diversion
• Supporting authentication technologies pre-production, post
production, import/export, within distribution and at the point of
dispensing is the most effective way to protect supply chain
inventories against counterfeiting, product adulteration, theft,
diversion and medication errors

21. Alan Clock, Senior Vice President, Sales and Marketing
a.clock@xstreamsystems.net
John Lundquist, Vice President, Sales and Business
Development
j.lundquist@xstreamsystems.net
Corporate Headquarters:
10305 102nd Terrace, Ste. 101  Sebastian, FL 32958
1-800-597-1191
www.xstreamsystems.net